Energy projects provide fuel on the road to recovery

Energy is fueling a $1.94 billion fire that could ignite our economy this year and in the near future.

That gaudy number reflects the upcoming investments in our community from four energy companies: First Energy, BP-Husky Refinery, PBF Refinery and Clean Energy. Those investments are:

• First Energy announced two weeks ago it would invest $600 million to upgrade the Davis Besse nuclear power plant near Oak Harbor;

• PBF Energy, owner of the former Sunoco Refinery, announced in December it would invest $140 million in the next 15 months to upgrade its 282-acre refinery on the Toledo-Oregon border;

• BP-Husky Refinery in the spring announced it would soon start its $400 million project to enable it to refine sour crude from the Husky oil sands in Alberta, Canada;

• The $800 million Oregon Clean Energy natural gas plant in Oregon is clearing environmental hurdles and is expected to break ground this spring.

Some 4,000 contractors will work at these sites this year and next and will not only give the local economy a boost, but position our area for potential growth in manufacturing.

The Davis Besse and Clean Energy projects will assure that manufacturers will have a reliable source of reasonably-priced power. Coupled with the City of Oregon’s capacity to deliver fresh water for industrial use, a Great Lakes’ port, available rail, a skilled labor force and proximity to the interstate crossroads of I-75 and I-80, Northwest Ohio has assets that are the envy of other communities competing for manufacturing jobs.

While good paying manufacturing jobs moved overseas some years ago, there are signs that trend is reversing itself. Consider what others have to say about a rebirth in U.S. manufacturing. Bill Simon, president and CEO of Walmart, the nation’s largest retailer, last year announced the creation of 1,000 new manufacturing jobs in the U.S. through its Made-In-America initiative. Simon stated his company would spend $50 billion in the next decade to buy American products such as light bulbs, socks, towels, door hardware and televisions.

Some local business experts also foresee resurgence. Dr. Sonny Ariss, chairman of the management department and fellow of the Center for Entrepreneurship and Technology Commercialization at the University of Toledo, stated in a September interview with The Press that there are two reasons for this rebirth. First, wages in Asian rim countries have increased while wages in the United States have decreased. Second, transportation costs have increased.

Dr. Stan Westjohn, professor of international business at the University of Toledo, adds a third reason—lower energy costs. The availability of cheap natural gas through fracking will mean manufacturers will have a stable, inexpensive source of energy. Next to labor, energy is their next highest cost and cheap energy can be the deciding factor in plant location. These three reasons make it advantageous for manufacturers to build closer to their consumers.

Tom Nimbley, CEO of PBF Energy, agrees. He spoke in December to the Oregon Economic Development Foundation. He said the “prospect of energy independence in North America is within our sights.” He cited fracking technology and the ability of Midwest refineries to process sour crude from the Alberta oil fields.

“This modern energy revolution will provide the foundation for a manufacturing renaissance that will stimulate the economy throughout all of North America,” he predicted. “I say what’s going to happen is people are going to seize that and say, ‘I’m going to build a plant in the United States instead of, say, in Dublin.’”

The Midwest and Ohio, in particular, are positioned to take advantage of this new dynamic. The Marcellus and Utica shale oil fields in the eastern part of the state hold vast deposits of natural gas.

All of this doesn’t mean Northwest Ohio will experience a manufacturing boom. However, our energy assets, coupled with a wealth of fresh water, a deep-water port, rail and highways gives us an edge over other U.S. communities. What we do with this edge will determine our future progress as we travel on the road to recovery.

Speaking of progress, in this week’s issue of The Press our editors report on the economic development gains our communities made in 2013 in our annual special section: Progress 2013: On the Road to Recovery.